The invention relates in general to a transaction card and methods for making and reading and apparatus therefor. In particular the invention relates to a transaction card having encrypted portions thereon to reduce the likelihood that such cards may be produced in bulk as part of a forgery scheme and used to defraud a merchant. The transaction card may be a proprietary credit card or proprietary stored value card as well as other types of card.
One of the problems associated with the issuance of credit cards, debit cards and other transaction cards capable of either holding stored value or being representative of stored value or line of credit is that they are subject to wholesale forgery. A number of attempts have been made to prevent such card forgery. For instance VISA and MasterCard systems use card validation encryption on the magnetic stripe. Unfortunately this has been found to be inadequate. Other schemes have been suggested including the use of paramagnetic strips, fractal encoding and computer holographic representations on the card. All of these have failed for various reasons, in part because many of them require the use of specialized counter-card forgery methods requiring specialized equipment. One of the problems with such equipment is that it must be added to the usual point-of-sale terminal in a retailer's floor operation and the cost of avoiding the losses for forgery tends to escalate due to the capital costs of the addition of such equipment.
What is needed then is a convenient low-cost method of insuring the authenticity of a transaction card in order to avoid accepting a forged card as legitimate and providing goods and services as a result thereof.